The tax gene product of the type I human T-cell leukemia virus (HTLV-I) is a potent transcriptional activator of various growth-related cellular genes, including that encoding interleukin-2 (IL-2). Tax activation of many of these target genes appears to be mediated by the NF-kappa B/Rel and CREB/ATF family of cellular transcription factors. However, the mechanism by which Tax transactivates the IL-2 gene remains unclear. In the present study, we demonstrate that neither NF-kappa B/Rel nor CREB/ATF is sufficient for Tax-mediated activation of the IL-2 promoter. Two novel nuclear protein complexes are induced by Tax and specifically bind to an IL-2 gene enhancer, the CD28-responsive element (CD28RE). Immunobiochemical analyses suggest that these DNA binding complexes contain at least two members of the nuclear factor of activated T cells, NF-ATp and NF-ATc. However, the CD28 binding NF-AT complexes do not contain Jun and Fos family proteins that have been proposed to serve as NF-AT partners in the activation of the IL-2 NF-AT motif. Transient transfection studies demonstrate that the in vivo expressed NF-ATp binds to the CD28RE probe and enhances Tax-mediated activation of this critical IL-2 enhancer. We demonstrate further that binding of NF-AT to CD28RE is critical for Tax activation of the IL-2 promoter. Together, these results suggest a novel mechanism of Tax-mediated activation of the IL-2 gene, which involves the induction of NF-AT-containing CD28RE binding complexes.